For Release: July 25, 2002
FLORIDA FEDERAL COURT ENJOINS RECIDIVIST IN ACTION ALLEGING HE MISAPPROPRIATED AT LEAST $1 MILLION IN CUSTOMER FUNDS AND VIOLATED A PRIOR FEDERAL COURT ORDER
Consent Order issued by United States District Court in Florida Enjoins Defendants Thomas D. Chilcott and Leona Westbrook from, among other things, Committing Fraud and also Permanently Bars Defendants from Commodity Trading
WASHINGTON, D.C. -- The Commodity Futures Trading Commission (CFTC) announced today that the U.S. District Court for the Middle District of Florida issued a consent order of permanent injunction on July 18, 2002, against defendants Thomas D. Chilcott and his wife, Leona Westbrook, both of Alva, Florida, settling a CFTC complaint filed on March 7, 2002, which charged Chilcott, Westbrook, and Ted E. Whidden with, among other things, defrauding at least 45 commodity pool investors (See CFTC News Release 4515-02, March 11, 2002).
In particular, the CFTC complaint alleged that Chilcott and Whidden solicited at least $2.5 million from customers to invest in a commodity pool, and that Chilcott and Whidden misrepresented to pool participants and prospective pool participants that the pool was trading profitably and that the value of the participants’ shares in the pool was increasing, when, in fact, during the course of the pool’s operation, it lost approximately $300,000 from trading. The complaint also alleged that Chilcott, Westbrook, and Whidden misappropriated at least $1 million of pool funds to pay personal expenses. Finally, the complaint alleged that, since September 1999, Chilcott and Whidden solicited prospective investors to open individual trading accounts and to invest in a commodity pool, all of which were to be traded by Chilcott, and that Chilcott and Whidden did not inform prospective investors that Chilcott was prohibited by a prior U.S. District Court order from soliciting or trading any customer commodity accounts.
The July 18, 2002, order enjoins Chilcott and Westbrook from further violations of the Commodity Exchange Act and of a prior order issued against Chilcott on July 10, 1981, by the U.S. District Court in Denver, Colorado. The order also permanently prohibits Chilcott and Westbrook from trading commodity futures contracts or options on commodity futures contracts, from seeking registration or exemption from registration with the CFTC, or from acting in any capacity requiring CFTC registration or exemption from registration.
Finally, the order requires Chilcott and Westbrook to pay restitution and a civil monetary penalty in an amount to be determined either by settlement, within 90 days of the entry of the order, or by a court hearing to be scheduled upon the expiration of the 90 days.
The CFTC’s litigation before the Florida District Court continues against defendant Whidden.
The following Division of Enforcement staff are responsible for this case: Richard Wagner, Eugene Smith, Paul Hayeck, and Kay Majors-Guy.
A copy of the CFTC complaint and consent order may be obtained at www.cftc.gov.
Media Enforcement Contact:
CFTC Division of Enforcement
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